GTM Household Help BLOG

Common Questions Regarding W-2s

Tax season is in full-swing and we are answering many questions from our household clients regarding W-2s. As a result, we thought it be beneficial to focus this month’s blog on some of them. Hopefully, after reading our responses, we’ll be able to save you some time and help clarify any of your concerns.

Q: Does my employee receive a 1099 form?
A: No. Household employees are not independent contractors. They receive W-2 forms. View more information on this topic.

Q: What is the deadline for giving the W-2 to my employee?
A: The W-2 form needed to be postmarked by January 31 of this year.

Q: I paid my employee directly for the first 4 months of the year. Are those wages included on the W-2?
A: Yes. You should include all wages (on your own or with the assistance of GTM (or other payroll provider) on one W-2 and not more than one.

Q: My employee was paid a net amount. Why are the wages on the W-2 higher than what I paid her?
A: The W-2 form reports “Gross” wages paid to an employee, not net. Even if you negotiated and agreed upon paying a net wage, your employee’s Social Security, Medicare and possibly Federal and State income taxes are added on top of the net in order to calculate the “Gross” wages that are reported as his/her income.

Q: When do I have to file the W-2 and W-3 with the Social Security administration?
A: If you have a payroll provider, you should first check with them to make sure they are not doing this on your behalf. If you have to do it on your own, the deadline for submitting the forms electronically is 2/29/2012. The deadline for filing a paper copy is 4/2/2012.

Q: What do I do with the Schedule H form?
A. This form is included with your personal income tax return. You should provide a copy to your accountant or should include the information, if filing your own return.

Q: What is reported on a Schedule H form?
A. A Schedule H form reports total gross wages, your employee’s portion and your employer portion of social security and Medicare taxes, your federal unemployment tax, and contributions made to your state for unemployment insurance.

Q: My employee was on disability for a few months. Are those wages included in the W-2 form? 
A: Yes. The disability company should have provided a report of your employees’ income that was paid out to her. You should provide this report to your payroll provider to be included in your employee’s W-2 wages.

 

As always, please contact us anytime at householdpayroll@gtm.com or 888-432-7972 if you have additional questions or would like to learn more about GTM Payroll Services Inc.

 

Important Changes To New York State Labor Law Under Wage Theft Prevention Act

On Tuesday, December 14^th, New York Governor, David Paterson, signed into law the Wage Theft Prevention Act.  Paterson was quoted as saying, “At a time when so many New Yorkers are living paycheck to paycheck, it is vital that we protect the right to receive their hard-earned pay and afford them every protection against wage theft.”

In essence, the new Wage Theft Prevention Act, or “The Act”, would institute a series of far-reaching measures which:

• Enact more stringent, transparent record-keeping and employee notification requirements
• Increase the amount of wages that can be recovered as damages for non-payment over and above lost wages – from 25 percent to 100 percent
  • Along with increasing protection for workers who speak up against exploitative employers
  • Create stronger collection, investigation and enforcement tools for State Department of Labor
  • Raise criminal penalties for wage violations; to up to a year in prison and $5,000 fine
  • Strengthen protections for whistleblowers in cases involving wage violations

In more detail, “The Act”, which goes into effect April 9, 2011, makes several changes to New York’s Labor Law, including:

• Amending requirements of employers to provide notices to employees hired on or after October 26, 2009; as well as information on exempt status, pay rates and structure of pay. (Section 195)
  • “The Act” further amended Section 195, adding a new requirement that employers provide all employees with such notices at the time of hire, as well as on or before February 1 of each subsequent year of employment. In addition to information previously required under Section 195, these notices now require new information, such the basis of pay rates (ie: hourly, shift, day, week, salary, piece, commission, or other); any allowances claimed as part of the minimum wage; as well as detailed employer contact information.
  • Further, the notice must be provided both in English and in the employee’s primary language. (The NYS Commissioner of Labor is tasked with creating non-English template notices.)
  • Employers must maintain these notices for six years.
  • An employee who does not receive such a notice within 10 days of hire may report this violation to NYS DOL; in effect bringing action against the employer to recover $50 per week not notified, up to $2,500.

• Information in wage statements— Employers are required to provide comprehensive pay statements each payroll period, specifying applicable dates that wages cover, employee/employer names, address and phone number, the rate or rates of pay and the basis thereof, gross deductions, allowances claimed as part of the minimum wage, and net wages. Non-exempt employees must be provided with statements that include the following additional information: the regular hourly rate or rates of pay, the overtime rate or rates of pay, the number of regular hours worked, and the number of overtime hours worked.

  • Employers must maintain these statements for six years.
• Liquidated Damages — Section 198 was amended to increase liquidated damages from 25% under the current law, to up to 100% of the total amount of wages due. 
• Additional Anti-Retaliation Penalties — Section 215 was amended to allow the NYS Commissioner of Labor to order additional remedies in retaliation actions; including heavy penalties and other recourse.
• Levies — The limitations period for actions brought under the Labor Law is tolled from the latter of the date of the employee complaint to the Department of Labor or the date of the NYS Commissioner of Labor’s commencement of an investigation.

Following a national trend toward strengthening worker-protection, New York now joins several states and localities with wage theft changes this year such as: Maryland, Illinois, Massachusetts, Nebraska and Washington.  

Available for download on GTM.com are the NYS (LS54) Pay Rate Notice Form (for Hourly Employees) and the NYS (LS59) Pay Rate Notice Form (for Exempt Employees).

GTM will continue to monitor these Labor Law changes to provide clients with ongoing support for all of their employment needs.  Our dedicated customer service team is available to answer any questions that clients may have regarding “The Act” in general; or more specifically in regard to calculating rate of pay, overtime rate of pay, or reporting requirements as amended under Section 195; Simply call (518) 373-4111 or email customerservice@gtm.com.

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At GTM we aim to provide access to the most comprehensive services & solutions available with better advice, better service and better value...for an easier life!  With nearly 20 years of experience in the payroll services industry, New York-based GTM Payroll Services has been continually guiding and educating thousands of clients throughout the U.S. with services such as labor compliance, human resources services, workers' compensation and health insurance needs. 

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The items included in this blog are informational only and are not meant to exclude the tax advice from an accredited representative.  Please consult the experts at GTM or another professional tax adviser for more information and to determine how any item applies to your personal tax scenario.

NY Labor Law Changes Take Effect November 29th

Provisions Under New York’s Domestic Workers’ Bill Of Rights Take Effect November 29^th

Important update for New York Employers regarding changing Labor Laws,
from the nanny payroll tax experts at GTM Payroll Services

Earlier this year, the landmark signing into law of New York’s Domestic Workers’ Bill of Rights, amended the state’s labor law, executive law and workers' compensation law; as they relate to the employment of domestic workers. 

On November 29, six specific provisions under this new law will go into effect.  Of particular importance is the establishment of regulations impacting:

1. Pay Frequency
2. Overtime Compensation
3. Time off (Unpaid and Paid)
4. Insurance
5. Notification to Employees and Record Keeping
6. Protection from Unlawful Discrimination

GTM recommends that all NYS employers review these changes to the labor laws, and take the appropriate action necessary for compliance, by or on November 29, 2010.  Please click here for more detailed information on each of the above provisions and steps that need to be taken. 

GTM will continue to monitor this legislation to provide clients with ongoing support to aid with all of their household employment needs.  Our customer service team is available to answer any questions that clients may have regarding this law.  Simply call (800) 929-9213 or email customerservice@gtm.com.

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At GTM we aim to provide access to the most comprehensive services & solutions available with better advice, better service and better value...for an easier life!  With nearly 20 years of advocacy for the professionalism of the household employment industry, New York-based GTM Payroll Services has been continually guiding and educating thousands of clients throughout the U.S. with services for household employment such as "nannytax", labor compliance, human resources help, workers' compensation and health insurance needs.  Additionally, Guy Maddalone's How To Hire A Nanny: A Household HR® Handbook (Sourcebooks/Sphinx Legal, 2006) has helped set the standard for any family interested in learning how to be a compliant and successful employer.  

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The items included in this blog are informational only and are not meant to exclude the tax advice from an accredited representative.  Please consult the experts at GTM or another professional tax adviser for more information and to determine how any item applies to your personal tax scenario.

Important Update for NYS Household Employers ~ NYS Domestic Workers' Bill of Rights Signed Into Law

On Tuesday, August 31 2010, NYS Governor Paterson signed the Domestic Workers Bill of Rights into law, which takes effect November 29, 2010.  The signing of the new law was to amend the labor law, the executive law and the workers' compensation law, in relation to establishing regulations regarding employment of domestic workers including hours of labor, wages and employment contracts.
 
The Domestic Workers Bill of Rights had many amendments, thus leaving out some proposed items passed by the Assembly as well as items that were passed separately by the Senate earlier this year. 

The final Domestic Workers Bill of Rights that was signed into law now establishes the following effective 11/29/10:

Labor Standards:

1. One day of rest every calendar week, waivable by the worker with pay for that day at the overtime rate of 1 and a 1/2 times their regular hourly rate. The day of rest will, whenever possible, coincide with the traditional day of religious worship.
2. After 1 year of work with the same employer, 3 days of rest per year at the regular rate of compensation.
3. It will be an unlawful discriminatory practice for any domestic employer to:

a)    engage in unwelcome sexual advances, requests for sexual favors or other verbal or physical conduct of a sexual nature to a domestic worker when:

i.    submission to such conduct is made a term or condition of the worker's employment;

ii.    submission to or rejection of such conduct by a worker is used as the basis for employment decisions; or

iii.    such conduct has the purpose or effect of unreasonably interfering with a worker's job performance by creating an intimidating, hostile or offensive working environment; or subject a domestic worker to harassment based on gender, race, religion or national origin, where such harassment has the effect of unreasonably interfering with work performance by creating a hostile working environment.

Wage and Hour

1. Consistent with the current law, Overtime pay after 40 hours of work per week for domestic workers who do not live with their employers.  And overtime pay after 44 hours of work per week for live-in domestic workers at a rate of 1 and a ½ times their regular hourly rate.  
2. Department of Labor is given wage and hour enforcement powers for domestic workers.

Insurance

a)    Disability Insurance to part time domestic workers. *  

*According to the ACTs summary provisions' Disability Insurance was listed as it would be required for Part time domestic workers.  However when GTM contacted the NYS Workers Compensation Board, who enforces disability and workers' compensation insurance requirements, they said the law had not actually changed and it is still a 40 hour minimum before domestic employers are required to have disability and workers compensation insurance.  We will continue to monitor this to see if that opinion changes.

GTM recommends that all NYS employers review these changes and make changes to their current employment agreements and handbooks by or on November 29, 2010.

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At GTM we aim to provide access to the most comprehensive services & solutions available with better advice, better service and better value...for an easier life!  With nearly 20 years of advocacy for the professionalism of the household employment industry, New York based, GTM Payroll Services has been continually guiding and educating thousands of clients throughout the U.S. with services for household employment such as "nannytax", labor compliance, human resources help, workers' compensation and health insurance needs.  Additionally, Guy Maddalone's How To Hire A Nanny: A Household HR® Handbook (Sourcebooks/Sphinx Legal, 2006) has helped set the standard for any family interested in learning how to be a compliant and successful employer.  

GTM will continue to monitor this landmark legislation to provide ongoing support to aid you with all of your household employment needs.

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The items included in this blog are informational only and are not meant to exclude the tax advice from an accredited representative.  Please consult the experts at GTM or another professional tax adviser for more information and to determine how any item applies to your personal tax scenario.

New York State Senate Passed The Domestic Workers Bill Of Rights

FOR IMMEDIATE RELEASE GTM Poised To Aid Domestic Staffing Agencies & Household Employers   JUNE 3, 2010– (Albany, NY) – Earlier this week, the New York State Senate passed the Domestic Workers Bill of Rights (S2311D) making New York the first state in the nation to move forward with new standards of worker protections for more than 200,000 employees in New York’s household employment industry.   A long-time advocate for the advancement and professionalism of the household employment industry, GTM recently highlighted Senator Savino, the first Senate Sponsor of the legislation, who stated, “They (domestic workers) are our companions to the elderly, housekeepers, and nannies and provide crucial services to those who employ them.  They should be afforded the same rights, respect, and dignity as the rest of workforce in our State.”   Every year, thousands of new families enter the market and take advice from ill informed friends and colleagues who believe you don’t have to pay taxes on workers or abide by labor standards.  This belief and consequential actions are of detriment to those working in households, who are all left penalized by lack of work history and benefits.  As noted in the Senate debate, hundreds of thousands of New Yorkers are able to do their own jobs and keep their families functioning only because they rely on the labor of nannies and caregivers.   GTM Founder and CEO, Guy Maddalone said, “After years of the industry promoting best practices and still only seeing a small percentage of compliance, it appears New York has now decided to take more extreme measures.”  He further stated, “It will be interesting to see how these new measures will impact tax and labor compliance.”   With nearly 20 years of advocacy for the professionalism of the household employment industry, New York based, GTM Payroll Services has been continually guiding and educating thousands of clients throughout the U.S. with services for household employment such as “nannytax”, labor compliance, human resources help, workers’ compensation and health insurance needs.  Additionally, Guy Maddalone’s How To Hire A Nanny: A Household HR® Handbook (Sourcebooks/Sphinx Legal, 2006) has helped set the standard for any family interested in learning how to be a compliant and successful employer.    More information on this important legislation can be found on the New York State Senate website (www.nysenate.gov).  For more information on our tax, payroll, HR and insurance services, visit the household employment experts at GTM.com.

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GTM’s expertise in the household employment and business services arenas enable us to offer the information, services, tools and resources our clients need. For a FREE – No Obligation Consultation for your household or business, contact GTM at 800.929.9213today!  Or chat LIVE with one of GTM’s professional Tax & Payroll Specialists at www.GTM.com.

At GTM we aim to provide access to the most comprehensive employee benefit plans & solutions available with better advice, better service and better value...for an easier life!

Federal Minimum Wage Rates To Increase In July

Under the Fair Labor Standards Act (FLSA), the federal minimum wage for covered nonexempt employees will increase to $7.25 per hour, effective July 24, 2009.

The federal minimum wage is the minimum amount per hour an employer (households and businesses (most business labor types) must pay their employees unless the state of employment has a higher state minimum wage or local prevailing wage. In that case, where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate.

More information on this increase can be found on the U.S. Department of Labor website. And for more information on tax, payroll and HR services, visit the experts at GTM.com.

Federal Minimum Wage to Increase to $6.55 on July 24, 2008

As part of the 2007 Minimum Wage change, this month the federal minimum wage rate per hour will increase from $5.85 per hour to $6.55 per hour.

The federal minimum wage is the minimum amount per hour an employer (households and businesses (most business labor types)) must pay their employees unless their state of employment has a higher state minimum wage or local prevailing wage, which in that case, employers must pay the highest minimum wage applicable to them.

Keep in mind, too, that the minimum wage will increase again on July 24, 2009 to $7.25. For more information about minimum wage, visit the Department of Labor web site. And for more information on tax, payroll and HR services, visit the experts at GTM.com.

Federal Minimum Wage Rate Increases to $5.85 Today

Effective today, the Federal Minimum Wage has officially changed to $5.85 an hour.  Many household employers may be tempted to feel that this change only applies to businesses, and not to their household help.  However, once you become a household employer you are, in effect, a business and you do need to follow all the applicable laws, including minimum wage and taxes.  Household employers are also responsible for 4 taxes: Social Security, Medicare, Federal Unemployment and State Unemployment.  Household employers also need to set up various tax ID numbers both state and federal. When paying your household employee, it is important to remember that this is the most important hiring decision that you will ever make.  You should consider how much this person is worth to you.  Paying your nanny fairly, and on the books, will show your nanny that you consider their position important.  It helps to keep your employee satisfied and loyal, and helps to establish a good relationship.  Keep in mind, too, that the minimum wage will increase again on July 24, 2008 to $6.55 and once again on July 24, 2009 to $7.25.  For more information about minimum wage, visit the Department of Labor web site.  And for more information on taxes and payroll, visit the experts at GTM.com.

Overtime, Nannies and Household Help

With the holidays fast approaching, many of us are out and about attending various events, parties and doing holiday shopping.  There will probably be occasions that require our nannies and household help to work extra hours here and there just so that we have the time to get things done that we need to get done.  It is important to remember our state and federal overtime laws, and that they apply to our household help as well.  Overtime pay is one and one-half times the regular pay rate. Overtime pay must be paid for work over 40 hours in a week.  Generally, live-in employees are not subject to overtime regulations, however state and locals may differ and can supersede the federal FLSA.  Visit our web site at www.gtmassociates.com to learn more about wages and overtime as well as all your tax and Human Resource needs.

Hidden Nanny Expenses – understand them before you Hire!

Time and time again, I hear this statement from new employers.   "If only we had known what all the "hidden" costs of employing a nanny in our home were before we hired her, it wouldn't be such a surprise to our budget!"

Just like anything you want to understand the ramifications of any actions you take, therefore families need to understand the implications of hiring and paying someone in their home. This is one of the purposes of my book, How to Hire & Retain Your Household Help as well as GTM's free tax and employment resource center.    In summary, hiring someone brings employment tax costs of approximately 10% to 12% of gross wages.  This would include employer portions of social security and medicare taxes, federal and state unemployment insurance, workers compensation and disability policy as well as the costs of GTM's nanny payroll system.  To get a better estimate before you hire use GTM's free nanny tax calculator or call a GTM expert at 888-432-7972.